Apple's entry into the arena of online streaming opens up the possibility of future competition with Amazon Prime Video and Netflix. To that end, the company is not going to spare any expense. According to a report by Bloomberg, Apple is planning to invest $1 billion toward original films and television shows over the next year. Apple might be entering this industry later than others, but they may yet be a force to be reckoned with in the near future.
A big bet
Apple is one of the most cash-rich corporations in the United States and one can be pretty sure that company will eventually match their rivals as far as investment is concerned.
Although there is no doubt that an investment of $1 billion over a period of 12 months is a big bet for Apple, it needs to be kept in mind that they are just starting out and will need to create top quality content to compete with their rivals. According to the Bloomberg report, Apple plans to roll out 10 new shows in 2017 and the bulk of the expenses is expected to go towards reaching those targets.
On the other hand, Apple recruited the executives who managed the cult show 'Breaking Bad' in June this year and they will not only be responsible for the production of original content but will also buy shows that will be available on the streaming service. The company's plans are still under wraps and those who spoke to Bloomberg did so anonymously.
Is it enough?
The $1 billion figure might appear significant as far as investment goes over a 12 month period but it is important to compare it to the investments that will be made by Apple's rivals. Netflix, the market leader has planned to spend $6 billion on new content, while market experts believe that Amazon is going to invest around $4.5 billion towards the same.
In such a situation, Apple's investment seems paltry and one might even say that the company's streaming service might not, in the end, cause much of a dent in the market.
However, it is necessary to point out that Apple's huge cash reserves give it a distinct advantage over its rivals in the long run and one might feel that the company is probably just testing waters this year.
If the initial investment proves to be fruitful then Apple might pour billions into their streaming service to grab a larger slice of the streaming services market. On the other hand, a long-drawn out battle for the market might see Apple competing with their competitors on an even footing as regards annual investment.
